September 18, 2018

New Tariffs on Chinese Imports

“The escalation of Trump’s tariffs on China comes after talks between the world’s two largest economies to resolve their trade differences produced no results. U.S. Treasury Secretary Steven Mnuchin last week invited top Chinese officials to a new round of talks, but thus far nothing has been scheduled.” (Reuters)

From the Left

The left is generally worried about the negative impact of tariffs on the economy, and that Trump’s aggressive and inconsistent strategy will be a barrier to successful negotiations with China.

From the Right

The right is divided about the tariffs.

“Morgan Stanley researchers estimate that the latest round [of tariffs] could reduce economic growth in the United States this year by 0.1 percentage points, adding to another 0.1 percentage-point drag from tariffs currently in place... The National Association of Chemical Distributors released a study this month that predicted nearly 28,000 chemical distributor and supplier jobs would be eliminated because of higher prices."

Moreover, “conflicting messages coming from the Trump administration... could sink prospective negotiations between the two nations before they begin...

"Chinese and American officials have held a series of talks over the dispute, and reached at least one agreement which was subsequently abandoned by the president. The lack of progress and collapse of that deal have made future negotiations more difficult, as it’s unclear who speaks for the U.S. administrationand there’s a lack of confidence that any deal will be honored.”

Bloomberg

Counterpoints:

“A 2017 report by the independent and bipartisan U.S. Commission on the Theft of American Intellectual Property put the annual cost of IP theft by all parties at $255 billion to $600 billion in counterfeit goods, pirated software and stolen trade secrets... Whatever else one might think of President Trump’s actions, he is confronting China about its unfair trade practices and theft of American intellectual property when too many others shy away from the truth for fear of Chinese reprisal.”

Los Angeles Times

These tariffs “may sound like a big deal, but... Over the past five months, the value of the the dollar has risen about 9 percent versus the yuan. That has already blunted the impact of the White House’s previous levies and means that this newest round won’t force importers to pay much, if anything, more for Chinese goods than they would have three months ago... For now, it seems like we’re watching a cat-and-mouse game between Trump’s tariffs and China’s currency.”

“China has repeatedly taken advantage of [WTO rules] by committing obvious violations – allowing time to injure foreign competitors as dispute panels deliberate – and then remedying violations after adverse decisions... The U.S. has won every WTO case it has brought against China since 2004 – and many before that date – yet Beijing’s trade behavior has only deteriorated.”

Fox News

Some claim that “free trade, like immigration, is an issue that has come at the expense of American workers... between 2001 and 2015, about 3.4 million U.S. jobs were lost [or displaced] due to the country’s trade deficit with China. Of the 3.4 million U.S. jobs lost in that time period, about 2.6 million were lost in the crippled manufacturing industry, making up about three-fourths of the loss of jobs from the U.S.-Chinese trade deficit."

Breitbart

Meanwhile, critics of the tariffs point to the impact on US consumers.

“Ultimately, tariffs are another tax and [healthcare] patients will be the ones who pay the steepest price... According to a recent survey conducted by the Medical Imaging & Technology Alliance (MITA)... the tariffs would cost companies nearly $140 million per year... To help make up for the shortfall, surveyed companies unanimously planned to reduce their U.S. workforces anddecrease their investments in research and development.”

Fox News

“General Motors alone has noted a $300 million increase in its commodity costs related to Trump’s steel and aluminum tariffs, while the beer industry estimates that it will suffer a $347 million annual hit...

"Trump may yet pull a rabbit out of his hat and conclude trade deals that feature notable gains for both American workers and consumers, but his current record is underwhelming, and the quality of future deals must be substantially improved if he’s simply to make up for the costs already incurred.”